Spanish PM Explains Opposition To German Energy Bid

Spanish Prime Minister Jose Luis Rodriguez Zapatero signaled on Feb. 22 that he was opposed for reasons of national interest to a $29.1 billion euro (US$34.6 billion) takeover bid for leading Spanish electricity group Endesa by E.ON of Germany. But he also indicated that Spain would not use a so-called "golden" share to block the bid.

"Markets are very important but for the government the citizens are more so," Zapatero said, having told E.ON chairman Wulf Bernotat he wanted to see Spanish energy utilities remain in Spanish hands, according to Spanish government sources. "The international rules of the game are paramount, yet must be compatible with reasonable national interest," Zapatero said.

Although the Spanish government currently maintains a golden share in E.ON, Spanish legislation to scrap it is in the pipeline following an EU ruling making such state holdings illegal and Zapatero said that the government did "not envisage" deploying it in a bid to stop the Germans.

A further legal measure the government could deploy is a ruling forbidding the entry into the energy sector of foreign enterprises in which their home state has a capital stake. The German federal state of Bavaria holds a small stake in E.ON.

The bid by E.ON's on Tuesday, at a 29% premium to an earlier bid by Gas natural of Spain, came as a shock to the government, although German Chancellor Angela Merkel had tipped off Zapatero the day before. On February 3, the Socialist Spanish government had cleared the way for a bid worth 22.5 billion euros from Spanish Gas Natural. Gas Natural said on Feb. 21 that it would maintain its bid but Endesa said following a board meeting that "the board considers that it (the offer) does not adequately reflect the true value of Endesa".